In letters dated Monday to Eritrean President Isaias Afwerki and to the U.N. Security Council, Ban said that as a result of the December 1 stoppage, the mission had only enough fuel to last until early March.

Ban called on Afwerki to address the issue "on an urgent basis", otherwise a U.N. decision would have to be taken in early February to begin withdrawing the 1,700-strong United Nations Mission in Ethiopia and Eritrea, or UNMEE.

"Given the gravity of the situation, I have to ... alert the (Security) Council of the imminent need for a decision on the fate of UNMEE, if the crisis is not resolved by the end of this month," said the letter, seen by Reuters.

The fuel stoppage is linked to the border dispute that brought the two impoverished Horn of Africa countries to war in 1998.

A 2000 agreement ended the conflict after 70,000 people had been killed but a decision two years later by an independent boundary commission to award the flashpoint town of Badme to Eritrea led to continued tension.

Ban noted that the fuel cut-off came the day after the Netherlands-based commission finally announced the demarcation of the 1,000-km (620-mile) border by map coordinates, but without physically delineating it on the ground.

Eritrea accepted the so-called "virtual demarcation", but it was rejected by Ethiopia.

Ban quoted a January 15 letter from Afwerki to the Security Council as saying that since the boundary "is now demarcated", the continued presence of UNMEE in Eritrea would be tantamount to occupation.

The current Security Council mandate for the peacekeeping force runs out at the end of January.

Analysts and diplomats have warned that fighting could resume, and last November Ban expressed concern about a military build-up by both countries along the border.

In his letters, Ban recalled that Eritrea had been limiting fuel supplies to UNMEE since September 2006, forcing the mission into austerity measures and reducing its operations.

The total shut-off had meant a drastic reduction in patrols and demining, a halt to the building of protection bunkers and the need to limit use of generators at UNMEE camps and some check-points to two hours a day, he said.